Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Katsiotis v Rogers [2021] NSWCATAP 269 Hearing dates: 16 June 2021 Date of orders: 10 September 2021 Decision date: 10 September 2021 Jurisdiction: Appeal Panel Before: G Blake AM SC, Senior Member C Mulvey, Senior Member Decision: (1) Leave to appeal is refused. (2) The appeal is dismissed. Catchwords: LEASES AND TENANCIES — Residential Tenancies Act 2010 (NSW) — Whether landlord is liable for compensation APPEALS – Whether lave to appeal should be granted Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 36, 80 and Sch 4, cl 12 Residential Tenancies Act 2010 (NSW), 43,47,50,109,175 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Cominos v Di Rico [2016] NSWCATAP 5 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Texts Cited: None cited Category: Principal judgment Parties: Maria Kara Katsiotis (First Appellant) Dikana Katsiotis (Second Appellant) Siobhan Rogers (Respondent) Representation: J Katsiotis (Agent) (Appellants) C Soussa (Managing Agent) (Respondent) File Number(s): 2021/00115579 Publication restriction: None Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 23 April 2021 Before: D Ash, General Member File Number(s): RT 20/50404 REASONS FOR DECISION Introduction 1. On 23 April 2021, a member sitting in the Consumer and Commercial Division of the Tribunal made orders (the Orders), the effect of which was to dismiss an application by the appellants for compensation following the discovery of an elusive rat at residential premises leased by the appellants from the respondent landlord. The member dismissed the claim and ordered Rental Bond Services pay to the respondent the whole of a rental bond, held in relation to the residential premises. 2. The tenants appeal, and seek leave to appeal, against the Orders. Their central contention is that the Tribunal should have found that there was a rat infestation rendering the premises uninhabitable and ordered the landlord to pay the appellants an amount for abatement of rent and both economic and non-economic loss. For the reasons set out below, leave to appeal is refused and the appeal is dismissed. The background 1. On 22 January 2020, the parties entered into a residential tenancy agreement in respect of premises at Bondi Junction (the premises). 2. On 27 October 2020, the tenants reported to the agent of the landlord the discovery of a rat at the premises. The rat was entering the kitchen mainly at night. 3. Despite attempts by the agent and strata management, the rat was unable to be removed. 4. On 20 November 2020, the tenant gave vacant possession of the premises to the landlord. The proceedings below 1. On 2 December 2020, the appellant commenced proceedings RT 20/50404 against the landlord by filing an application in which they sought payment of the rental bond, rent abatement and compensation. 2. On 15 April 2021, the Tribunal conducted the hearing. The tenants appeared at the hearing represented by their father Mr J Katsiotis (as agent). Mr C Soussa, the landlord's managing agent, represented the landlord at the hearing. 3. At the 15 April 2021 hearing, the documentary evidence of the landlord comprised: 1. Statutory declaration of Maria Kara Katsiotis; 2. Statutory declaration of Dikana Katsiotis; 3. Removalists receipt; 4. Table of "Weekly Reasonable Food and Drink Components" of the "Living Away From Home Allowance"; 5. Bank statements showing Bunnings expense for rat trap and video camera; 6. Vet invoice 27.10.20; 7. Vet invoice 29.10.20; 8. Pet insurance claim; 9. Bank statements showing storage fee; 10. Bank statements showing Kmart expense; 11. Pay slips of Maria Kara Katsiotis and Dikana Katsiotis; and 12. Still pictures of rat. 1. It is not clear what evidence the landlord relied upon at the hearing on 15 April 2021. 2. On 23 April 2021, the Tribunal provided the reasons for its decision which relevantly provide: "21 Neither party relied on an expert report in relation to addressing circumstances such as these. In the absence of an expert report, the Tribunal observes: (1) There is no evidence that more than one rat entered the premises at any one time. The Tribunal will refer to 'the rat' without deciding whether different rats appeared on different occasions. (2) A rat is an animal capable of eating food typically found in kitchens, of leaving droppings, and of carrying and spreading disease. The rat was such a rat. (3) There is no evidence that the rat had set up house in the premises. To the contrary, the evidence tends to suggest that the observation by the pest controller that there were not rats inside was correct and remained correct. That said, the evidence tends to indicate that a rat, though neither residing in, nesting in or living at the premises, was getting in nightly/almost nightly, and after coming in, was feeding and leaving droppings. (4) A rat can be elusive. The rat was never seen 'live' in the presence of a person and was such a rat, entering the premises when they were dormant, i.e. neither the tenants nor their dog were moving around. (5) Whatever form a pest takes, it is inherent in the idea of a pest that dealing with it is not always a simple or straightforward task. As to the claim for breach: 22 A landlord must provide premises in a reasonable state of cleanliness and fit for habitation, and must provide and maintain the premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. 23 The tenants argued first that any holes in the premises established a want of fitness for habitation and a want of maintenance. 24 The Tribunal rejects the argument. The Tribunal is satisfied that wooden floors on a ground floor apartment of an 80 or 90 year old building may tend to have holes and gaps which arise from the wood changing in shape or the building settling, in either case without the premises becoming structurally unsound. There was no evidence of structural unsoundness in relation to the building itself. There was no evidence that the issue confronting the tenants had arisen before. On the material before it, there is no evidence of breach. 25 The tenants argued secondly that the failure to deal with the repeated ingress in a timely manner was a breach. 26 When informed of the tenants' concern, the agent took immediate steps to ensure that the person in control of the area outside the premises, i.e. the owners corporation, did something. It did do something. It retained someone holding themselves out as a pest controller, to perform their advertised job. 27 In turn, the pest controller did do things. He promptly attended and formed a view - which remained on the evidence a correct one - that the rat(s) were not inside the premises but outside the premises. There is no evidence that he expressed a view that rats outside the premises were getting in, but his actions and the actions of everyone involved were consistent with that view being held by everyone at all relevant times. 28 The pest controller did things inside and outside. Other persons, the tenants and the agent, did things, although the Tribunal is not satisfied that those deeds have any relevant to the question of breach. 29 Despite the pest controller doing things, a rat kept getting in. 30 Assuming without deciding that the landlord via her agent had a duty to oversee the actions of the pest controller retained by the owners corporation and to get in a new pest controller if the actions were defective, at what stage did the landlord breach that duty? 31 The tenants' answer is an inference: by 17 November 2020 a rat was still entering the premises, therefore the measures taken by the pest controller were, to use the words in the tenants' written submissions, 'ineffectual and amateurish'. 32 The Tribunal declines to draw that inference. The evidence is that a pest controller, despite doing something, had not been successful in removing the pest by a point in time. The Tribunal declines, the absence of evidence expert or otherwise, to elevate the lack of success into a breach of duty by the landlord. As to the claim for the return of bond: 33 The tenants, although they assert a breach, did not engage section 98 or section 103 of the Act as a means for terminating for breach. 34 The upshot is that they abandoned the premises and the landlord was entitled to compensation for the abandonment. The agreement being entered into prior to March 2020 and being in the standard form, the compensation was a break fee in the amount of four weeks' rent, here the amount of the bond. 35 The Tribunal has a discretion to refuse a landlord a break fee. In circumstances where the tenants chose to abandon the premises through no fault of the landlord, the Tribunal declines to exercise a discretion which will have the effect of depriving the landlord of the fruit of their bargain. As to abatement: 36 As pointed out earlier, abatement arises without fault and not upon it. 37 Be that as it may, the Tribunal is not satisfied that these premises were partially or wholly uninhabitable at any time up to the tenants' departure. 38 It may be accepted that the repeated ingress by a rat impugned the amenity and use afforded to the tenants by their right of possession. The Tribunal acknowledges that the tenants themselves chose to sleep in one room only. 39 The question of whether a place is uninhabitable is a question which involves consideration of a spatial or a temporal deficit. The question directs attention not to the reasonableness of someone choosing not to live at residential premises but to whether someone cannot live at the premises. The Tribunal is not satisfied on the evidence that there was a deficit which meant that, at any time up to 20 November 2020, the premises were premises at which a person could not live. 40 The Tribunal rejects the claim for abatement." The procedural history of the Appeal Panel proceedings 1. On 26 April 2021, the tenants commenced proceedings 2021/00115579 against the landlord by filing a notice to appeal in which they seek leave to appeal against the decision of the member dismissing the claim, and in which they relevantly set out: 1. the following grounds of appeal: "NCAT made an error of law in concluding that s.109 of the R.T.A. 2010 did not apply. The issues are as follows: a) to what extent does a rat infestation render residential premises uninhabitable? b) whether the alleged uninhabitability was brought about by a breach of an agreement?" 1. the following reasons why the decision was not fair and equitable: "NCAT erred at law in concluding that s.50(2) of the R.T.A. 2010 did not apply. The question arises: what constitutes reasonable interference?" 1. the following orders the NCAT Appeal Panel should make "1 An order for the release of or repayment of rental bond number S636834-6 to the Appellants [s.175(1)]. 2 An order for the abatement of rent equivalent to four weeks' rent [s.43(2)(a)]. 3 An order for reimbursement of the Appellant's economic loss resulting from the events outlined in the original application [s.187(1)(c)]. 4 An order for the payment of non-economic loss in the form of compensation for loss of enjoyment of residential premises [s.187(1)(d)]." 1. On 4 May 2021, the Appeal Panel made various orders for the service of evidence. 2. We note that the parties filed evidence and submissions in compliance with those orders. 3. There was no transcript or recording of the proceedings below put before the Appeal Panel. Evidence filed in the appeal 1. On 25 May 2021, the appellants filed a bundle of documents which comprised all of the documents relied upon before the Tribunal. Written submissions are also relied upon. 2. The respondent filed a reply to the appeal on 30 April 2021 opposing leave being granted to appeal and the appeal itself. A bundle of documents were filed on 4 June 2021 together with written submissions. 3. Before considering whether leave to appeal should be granted, it is appropriate to set out the statutory provisions and legal principles applicable to the granting of leave to appeal, and summarise the submissions of the tenant. The statutory provisions and legal principles applicable to leave to appeal 1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). 2. An internal appeal is not a re-hearing of the original proceedings or a mere opportunity for a party dissatisfied with the outcome in the original proceedings to re-argue its case: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must establish an error of law has occurred; or otherwise an error of the type that it is appropriate to grant leave to appeal. 3. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance." 1. In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that: 1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act; 2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. 2. In Collins, the Appeal Panel at [84(2)] stated that ordinarily it is appropriate to grant leave to appeal only in matters that involve: "(a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed." 1. In Cominos v Di Rico [2016] NSWCATAP 5 (Cominos), the Appeal Panel at [13] stated that it may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The submissions of the appellants 1. The appellants relevantly make the following submissions: 1. the primary issue is whether the Tribunal erred in determining that s 109(1) of the Residential Tenancies Act 2010 (NSW) ('the RT Act') was not applicable to the claim. If the answer is in the affirmative and the appellants' actions to terminate the lease were valid, then no order should have been made in favour of the landlords under s 175(1) of the RT Act. Rather the Tribunal could have made an order under s 43(2) of the RT Act or, alternatively s 47(4) or (5); 2. when determining if the premises were uninhabitable, the Tribunal ignored the health impact a rat may have on the appellants; 3. the Tribunal incorrectly considered the effect of the appellants remaining to live in the premises when alleging uninhabitability; 4. the Tribunal did not find there was a breach of the appellants right to quiet enjoyment s 50(2) of the RT Act and should have done so. The appellants content the breach occurred not by a failure of the landlord to carry out maintenance before the detection of the rat, but by the landlord's failure to rectify the problem after the fact and restore the appellant's previous peaceful and settled condition as quickly as possible. Consideration 1. We are not satisfied the appellants have suffered a substantial miscarriage of justice within the meaning of cl 12(1) of Sch 4 of the NCAT Act on any of the following bases: 1. the decision of the Tribunal under appeal was not fair and equitable; 2. the decision of the Tribunal under appeal was against the weight of evidence; 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. Having regard to the principles in Cominos, we have not discerned from the orders challenged on appeal and the grounds of appeal in the notice of appeal, the material provided by the appellants, and the Tribunal decision, any basis for contending that the decision of the Tribunal under appeal was not fair and equitable. There is no indication that there was a denial of procedural fairness to the appellants. 2. The Tribunal member made the following key factual findings: 1. there was no expert report relied upon by either party; 2. there was no evidence that there was more than one rat, or, that it had "set up house in the premises"; 3. the landlord's agent took immediate steps to engage pest control experts to rectify the issue. Despite these actions the rat was persistent in entering the premises; and 4. the appellants continued to reside in the premises after the rat was detected up until 20 November 2020. 1. The first of these factual findings was justified and was not disputed. 2. The second of these factual findings was justified by the whole of the evidence including the photographs tendered by the appellants. Each of the photographs show only one rat. There is no evidence or more than one rat. 3. The third of these factual findings was justified by the whole of the evidence. We reject the appellants' argument that the actions taken by the landlord's agent were not appropriate particularly in the absence of expert evidence to the contrary. A pest control expert was engaged to address the problem enabling the member to make a reasonable finding. 4. The fourth of these factual findings was justified by the whole of the evidence. The appellants agree that the date they vacated the premises was on 20 November 2020. 5. This appeal is nothing more than a complaint about the outcome. It does not raise any issue of principle, or question of public importance or policy that might have general application. We reject the contention that the appeal raises issues of public health. It does not identify any factual conclusion that was clearly arrived at because of a mistake. It makes no complaint about how the Tribunal went about the fact-finding process. 6. In these circumstances, the evidence in its totality did not preponderate so strongly against these factual findings of the Tribunal that it can be said that these conclusions were not ones that a reasonable Tribunal member could reach. 7. If, contrary to our decision, we had been satisfied that the appellants may have suffered a substantial miscarriage of justice within the meaning of cl 12(1) of Sch 4 of the NCAT Act, then we would not have exercised the discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act because this appeal does not involve any of the factors in Collins at [84(2)]. 8. For the sake of completeness, we also considered whether the member made an error of law in respect of the correct legal principles to apply to "uninhabitability" under s 109(1) of the RT Act. 9. Section 109 of the RT Act provides: 109 Agreement frustrated—destruction of, or uninhabitable, premises (1) This section applies if residential premises under a residential tenancy agreement are, otherwise than as a result of a breach of an agreement, destroyed or become wholly or partly uninhabitable or cease to be lawfully usable as a residence or are appropriated or acquired by any authority by compulsory process. (2) The landlord or the tenant may give the other party a termination notice. (3) The termination notice may end the residential tenancy agreement on the date that the notice is given. (4) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement. (5) The Tribunal may, on application by a landlord or tenant, make a termination order if it is satisfied that a termination notice was given in accordance with this section and that this section applies to the residential premises. 1. The member in his reasons sets out why he found against the appellants on the question of 'uninhabitability'. He said: "…The question directs attention not to the reasonableness of someone choosing not to live at residential premises but to whether someone cannot live at the premises. The tribunal is not satisfied on the evidence that there was a deficit which meant that, at any time up to 20 November 2020, the premises were premises at which a person could not live." In our minds this finding was reasonable on the evidence. It clearly sets out the correct legal principles and how the Member applied such principles to the facts. No error of law is established. 2. We also considered the appellants contention that the member incorrectly applied s 50(2) of the RT Act, which provides: 50 Tenant's right to quiet enjoyment (1) A tenant is entitled to quiet enjoyment of the residential premises without interruption by the landlord or any person claiming by, through or under the landlord or having superior title (such as a head landlord) to that of the landlord. (2) A landlord or landlord's agent must not interfere with, or cause or permit any interference with, the reasonable peace, comfort or privacy of the tenant in using the residential premises. … 1. The respondent does not agree this was raised in the Tribunal below. There has been no sound recording or transcript put before us in this appeal. However, it matters not given our finding which follows. 2. The appellants contend that the ongoing breach by the rat interfered with their right to quiet enjoyment of the premises: para [25] and [32] of the decision. We reject this contention. It was open to the member to find that the landlord's actions in engaging a pest controller were adequate and not as put by the appellants "ineffectual and amateurish". No error of law is established. Orders 1. Having regard to the principles in Cominos, we have not discerned from the orders challenged on appeal and the grounds of appeal in the notice of appeal, the material provided by the appellants, and the Tribunal decision, any basis for contending that the Tribunal made an error of law. It follows that we can dispose of the appeal. 2. We make the following orders: 1. leave to appeal is refused; 2. the appeal is dismissed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 September 2021